Stewart v. Professional Computer Centers, Inc., 97-2463

• Decision Date: 28 July 1998
• Docket Number: No. 97-2463,97-2463
• Citation: 148 F.3d 937
• Parties: 77 Fair Empl.Prac.Cas. (BNA) 71, 73 Empl. Prac. Dec. P 45,433 Alelia I. STEWART, Plaintiff--Appellee, v. PROFESSIONAL COMPUTER CENTERS, INC., doing business as Connecting Point Computer Centers, Defendant--Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 937

148 F.3d 937

77 Fair Empl.Prac.Cas. (BNA) 71, 73 Empl.

Prac. Dec. P 45,433

Alelia I. STEWART, Plaintiff--Appellee, v. PROFESSIONAL COMPUTER CENTERS, INC., doing business as Connecting Point Computer Centers, Defendant--Appellant.

No. 97-2463.

United States Court of Appeals Eighth Circuit.

Argued April 14, 1998.

Decided June 26, 1998.

Rehearing Denied July 28, 1998.

R. Christopher Abele, Kansas City, MO, argued (Theresa L.F. Levings, Kansas City, MO, on the brief), for Appellant.

Daniel Robert DeFoe, Blue Springs, MO, argued, for Appellee.

Before BOWMAN, Chief Judge, ¹ McMILLIAN and MURPHY, Circuit Judges.

MURPHY, Circuit Judge.

This appeal involves whether the parties intended that an offer of judgment under Fed.R.Civ.P. 68 was to include attorney fees and costs. After Alelia I. Stewart filed sex and age discrimination claims, her former employer Professional Computer Centers, Inc. (doing business as Connecting Point Computer Centers), made an offer of judgment in the amount of $4,500. Stewart accepted Connecting Point's offer, and judgment was entered. Stewart then moved for attorney fees and costs. A magistrate judge, presiding with the consent of the parties, granted the fees motion. Connecting Point appeals on the ground that its lump sum offer was intended to cover everything sought in the complaint. We reverse and remand.

Connecting Point's initial offer stated only that upon its acceptance judgment would be entered "against Defendant in the amount of FOUR THOUSAND FIVE HUNDRED AND No/100 DOLLARS ($4,500.00) as provided in Rule 68," and Stewart asked that it clarify what was included in the offer. Connecting Point then provided a somewhat fuller statement that "judgment be entered on any or all counts against Defendant in a total amount not to exceed FOUR THOUSAND FIVE HUNDRED AND No/100 DOLLARS ($4,500.00) as provided in Rule 68." At the time of the offer the amended complaint contained three counts, each of which pled that Stewart had "incurred liability for attorney's fees, costs, and other expenses" and two of which requested judgment in her favor for "[c]osts and expenses of this action, including reasonable attorney's fees."

On the same day that Stewart accepted the offer, she also notified Connecting Point in writing that she would be seeking attorney fees as "costs then accrued" under Fed.R.Civ.P. 54. She filed her fees motion soon thereafter. ² Connecting Point opposed the fees motion and moved to alter or amend the judgment under Fed.R.Civ.P. 59(e) or to vacate the judgment under Fed.R.Civ.P. 60(b)(1). Connecting Point argued that its offer of judgment included any and all attorney fees and costs and that Stewart's motion for attorney fees should be treated as a Rule 59 motion.

The district court granted the motion for attorney fees and denied Connecting Point's postjudgment motions. The court held that Stewart was entitled to fees and costs as a prevailing party. It interpreted Marek v. Chesny, 473 U.S. 1, 9, 105 S.Ct. 3012, 87 L.Ed.2d 1 (1985), to require the addition of costs to the judgment because Connecting Point's offer had not specified that it included costs or an amount for costs. The court declined to amend the judgment to include the language from the complaint requesting attorney fees and costs or to vacate the judgment because there had been no meeting of the minds on the specifics of the offer.

Connecting Point argues on appeal that its lump sum offer of judgment covered everything Stewart sought in any and all counts of her complaint and that the complaint mentioned attorney fees as an element of recovery and specifically asked for fees and costs in the discrimination counts. Connecting Point claims its offer was clear and notes it specifically referred to all counts pled. Alternatively it argues that if Stewart had not understood its offer included fees, there was no meeting of the minds to create a binding agreement. It concludes that therefore the judgment should be limited to a total of $4,500 or it should be vacated to place the parties where they were before any misunderstanding arose.

Stewart responds that the offer of judgment did not contain a specific reference to attorney fees or costs and that the district court therefore had the discretion to award fees in addition to the $4,500 judgment. She further argues that there is no evidence in the record beyond the offer of judgment itself regarding the intent of the parties and that Connecting Point has not established a right to relief under either Rule 59 or Rule 60.

Principles of contract law are applied to test whether there has been a valid offer and acceptance under Rule 68. See Radecki v. Amoco Oil Co., 858 F.2d 397, 399 (8th Cir.1988). In order to create a binding agreement there must have been an objective manifestation of mutual assent. This can be inferred from external indications reflecting thoughts and intentions of the parties which show a "meeting of the minds." See 1 Corbin on Contracts § 4.13 (Rev. ed.1993); see also Radecki, 858 F.2d at 400 (applying this principle to Rule 68 offers and acceptances and citing other cases). There is no binding agreement if "the parties attach materially different...